PART 1: PREPARATION
x Make a list of every negotiating point: what we have that they may value and what they have that we
x Find other options.
x Find your breakeven cash flow.
x Set a target pricevhow much you want to get.
x In all negotiations, the parties must divide the resources.
x Most negotiations are multidimensional. They offer opportunities for integrative, pie-enlarging
x /(Ç}v[Ç}vo mutually beneficial proposals, the negotiation may falter and good
opportunities may remain unexplored, leaving potential value undiscovered.
x Often the cure for unrealistic expectations.
x Critical to reaching an optimal agreement.
x Can be obtained through research, asking questions, and listening to others.
x Base figures from which negotiators add or subtract to judge offers.
x Research shows that people consistently look for and rely on anchors in making judgements,
whether they are based on anything relevant or not.
x In negotiations, the first number presented often becomes an anchor.
x The position of an anchor very often strongly affects the final outcome.
Common Negotiating Errors That Cause Us to Behave Irrationally
x Most common error in negotiations.
x Can cause us to overlook integrative solutions and opportunities for trade-offs.
x A case where we fail to consider all relevant information and end up with no deal or a
x Overconfident negotiators often think they know in advance how a negotiation should end.
x May shut out new sources of information and refuse to consider alternative solutions.
2. Irrational Escalation of Commitment
commitment to getting a deal until we accept one which actually makes us worse off than no
deal at all.
x Out of desire to close the deal, we escalate to irrational levels.